senate Bill S6573

Relates to increasing a pension exemption

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Bill Status


  • Introduced
  • In Committee
  • On Floor Calendar
    • Passed Senate
    • Passed Assembly
  • Delivered to Governor
  • Signed/Vetoed by Governor
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  • 07 / Feb / 2014
    • REFERRED TO INVESTIGATIONS AND GOVERNMENT OPERATIONS

Summary

Relates to increasing a pension exemption.

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Bill Details

Versions:
S6573
Legislative Cycle:
2013-2014
Current Committee:
Senate Investigations And Government Operations
Law Section:
Tax Law
Laws Affected:
Amd ยง612, Tax L

Sponsor Memo

BILL NUMBER:S6573

TITLE OF BILL: An act to amend the tax law, in relation to increasing
a pension exemption

PURPOSE:

This bill updates the law regarding pensions and annuities. It
increases the amount that private-sector pensions and annuities are
exempt from the Personal Income Tax to $75,000.

SUMMARY OF PROVISIONS:

Section 1 amends paragraph 3-a of sub-section (c) of section 612 of
the Tax Law. It increases to $75,000 the amount from pensions and
annuities received by an individual who has attained the age of
fifty-nine and one-half that can be excluded from the calculation of
gross income. Specifically, the funds to be excluded must be periodic
payments attributable to personal services performed by the individual
prior to their retirement. The funds must come from an
employer-employee relationship or from contributions to a retirement
plan which are deductible for federal income tax purposes.

Section 2 provides that this act shall take effect on the first of
January next succeeding.

JUSTIFICATION:

This bill is necessary to update the tax ceiling for retirement income
derived from pensions and annuities. The current law is out of date.
It does not reflect the growth in retirement income that has occurred
since its enactment in 1982. Since that time the Consumer Price index
has increased by 135 percent.

Furthermore, this bill is necessary to ensure that the recipients of
income received from private-sector pensions and annuities are treated
in a similar fashion as the recipients of income received from
public-sector or government pensions. Income from government pensions
is exempt from the Personal Income Tax. Whereas, currently, only the
first $20,000 of income from private-sector pensions and annuities is
exempt from the Personal Income Tax. This bill seeks to level the
playing field. It will treat the recipients of private-sector pensions
and annuities in a more equitable fashion. This bill will exempt up
to $75,000 of income that individuals receive from private-sector
pensions and annuities from Personal Income Tax. It will allow those
individuals to improve their quality of life and become more fiscally
solvent. This bill will treat their retirement income in a more
equitable fashion.

LEGISLATIVE HISTORY:

New Bill.

FISCAL IMPLICATIONS:

To be determined.


EFFECTIVE DATE:

This act shall take effect on the first of January next succeeding.

view bill text
                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                  6573

                            I N  S E N A T E

                            February 7, 2014
                               ___________

Introduced  by  Sen. RITCHIE -- read twice and ordered printed, and when
  printed to be committed to the Committee on Investigations and Govern-
  ment Operations

AN ACT to amend the  tax  law,  in  relation  to  increasing  a  pension
  exemption

  THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section 1. Paragraph 3-a of subsection (c) of section 612 of  the  tax
law,  as  amended by chapter 760 of the laws of 1992, is amended to read
as follows:
  (3-a) Pensions  and  annuities  received  by  an  individual  who  has
attained  the  age  of  fifty-nine  and one-half, not otherwise excluded
pursuant to paragraph three of this subsection, to the extent includible
in gross income for federal income tax purposes, but not  in  excess  of
[twenty]  SEVENTY-FIVE  thousand  dollars,  which  are periodic payments
attributable to personal services performed by such individual prior  to
his retirement from employment, which arise (i) from an employer-employ-
ee  relationship  or  (ii) from contributions to a retirement plan which
are deductible for  federal  income  tax  purposes.  However,  the  term
"pensions and annuities" shall also include distributions received by an
individual  who  has attained the age of fifty-nine and one-half from an
individual retirement account or an individual  retirement  annuity,  as
defined  in section four hundred eight of the internal revenue code, and
distributions received by an individual who  has  attained  the  age  of
fifty-nine and one-half from self-employed individual and owner-employee
retirement  plans  which  qualify  under section four hundred one of the
internal revenue code, whether or  not  the  payments  are  periodic  in
nature.  Nevertheless,  the  term  "pensions  and  annuities"  shall not
include any lump sum distribution, as defined  in  subparagraph  (A)  of
paragraph  four  of  subsection  (e)  of section four hundred two of the
internal revenue code and taxed under section six hundred three of  this
article. Where a husband and wife file a joint state personal income tax
return,  the  modification  provided  for  in  this  paragraph  shall be
computed as if they were  filing  separate  state  personal  income  tax

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD13952-01-4

S. 6573                             2

returns.  Where a payment would otherwise come within the meaning of the
term "pensions and annuities" as set forth  in  this  paragraph,  except
that  such  individual is deceased, such payment shall, nevertheless, be
treated  as  a pension or annuity for purposes of this paragraph if such
payment is received by such individual's beneficiary.
  S 2. This act shall take effect on the first of January next  succeed-
ing the date on which it shall have become a law.

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